Can the AIFC Court Enforce Foreign Arbitral Awards?

15 May 2026 — Preliminary enforcement granted in Naftogaz v. Gazprom. The AIFC Court of First Instance, sitting through Justice Andrew Spink, granted preliminary enforcement to a USD 1.37 billion ICC award. The award arose from a Zurich-seated arbitration over a 2019 gas transportation contract that Gazprom stopped performing after Russia's 2022 invasion of Ukraine. Naftogaz filed a "without notice" enforcement application within the AIFC territory in January 2026; the order was made subject to a 14-day window for Gazprom to apply to set it aside.

25 May 2026 — The Minister of Justice intervenes. In a structured on-the-record interview with the Kazakh legal news outlet zakon.kz, Minister of Justice Yerlan Sarsembayev stated publicly that the AIFC Court's order would not be executed on Kazakhstan's territory, set out the Ministry's view that the AIFC Court lacks jurisdiction over the matter, and disclosed that the Ministry is preparing legislative amendments on the recognition and enforcement of foreign arbitral awards in Kazakhstan.

27 May 2026 — Jurisdiction declined in POSCO. A different judge of the same court, Justice Rupert Jackson, declined jurisdiction to enforce an ICC award arising from a 2013 loan agreement between the Korean company POSCO and a Kazakh state-owned entity. The claimant had been frustrated by repeated refusals from Almaty courts; the AIFC route was its alternative. Justice Jackson held that the AIFC Court's jurisdiction extends only to awards rendered under the AIFC International Arbitration Centre (IAC) Rules, and concluded that the prior rulings extending jurisdiction to foreign awards — Pacific Trade House Limited v. Altai Polymetals LLP (since discontinued on settlement, 16 September 2026), Roads Department of Georgia v. Todini, and Naftogaz v. Gazprom — had been "wrongly decided." Posco Co. Ltd. v. National Centre for Complex Processing of Mineral Raw Materials, Case No. AIFC-C/CFI/2025/0066.

7 July 2026 — The enforcement order in Naftogaz v. Gazprom is set aside. Justice Lord Faulks KC, hearing full argument from both sides for the first time, set aside Justice Spink's order and dismissed Naftogaz's enforcement application. He held that the dispute did not fall within the jurisdictional gateways in Article 13(4) of the Constitutional Statute, and preferred Justice Jackson's reading of Article 14(4) in POSCO. Naftogaz v. Gazprom, Case No. AIFC-C/CFI/2026/0002.

21 August 2026 — Permission to appeal granted in Naftogaz v. Gazprom. Justice Faulks gave Naftogaz permission to appeal, pointing to the different views that first instance judges have taken on the power to enforce foreign awards. Under Article 13(7) of the Constitutional Statute, decisions of the AIFC Court of Appeal are final and binding.

Article 13(4) of the Constitutional Statute gives the AIFC Court exclusive jurisdiction over three categories of dispute: disputes between AIFC Participants, AIFC Bodies and expatriate employees; disputes relating to activities conducted in the AIFC and governed by the Acting Law of the AIFC; and disputes transferred to the AIFC by agreement of the parties. Enforcement of a foreign arbitral award is not explicitly listed among the three.

That point went unargued until July 2026. Justice Faulks records that it was not put to Justice Spink, and that the focus in POSCO was Article 14 as well. Counsel for Naftogaz, who had appeared at the earlier hearing, confirmed that the point had not been taken because it had not seemed necessary.

Naftogaz answered the gateway argument by inviting the court to read Article 13 against the wider constitutional context, arguing that the AIFC Court exercises a general civil and commercial jurisdiction within the Kazakh system rather than being a "special" court of the kind the Kazakh constitution prohibits. Justice Faulks was not persuaded. He pointed to the word "exclusively" in Article 13(1) and "exclusive" in Article 13(4), and to Article 13(2), under which the court "is independent in its activities and is not part of the judicial system of the Republic of Kazakhstan." He adopted Justice Jackson's description of the AIFC Court as "a creature of statute, not a court of inherent jurisdiction like the High Court in England and Wales," whose powers "are defined in and limited by the Constitutional Statute."

The dispute over the AIFC Court's foreign-award jurisdiction rests on a translation issue that, in a serious international financial centre, should not exist.

The AIFC Constitutional Statute is binding only in its Kazakh and Russian versions; the English translation has no official status. The translation posted on the AIFC website states that "[a]wards of arbitration courts in the Republic of Kazakhstan are to be recognised and enforced in the territory of the AIFC in accordance with legislation of the Republic of Kazakhstan." That formulation reads as if Article 14(4) covers Kazakhstani court judgments, not arbitral awards from any source.

A second English version, treated as a working translation in prior AIFC cases, reads differently: "Recognition and enforcement of arbitral awards in the territory of the Centre shall be carried out in accordance with the legislation of the Republic of Kazakhstan". That version reads more naturally as a general enforcement provision covering arbitral awards as a category.

Naftogaz relied on the second translation. POSCO, having lost in Almaty, did the same. In POSCO, the court examined the underlying Kazakh and Russian text with the assistance of trilingual counsel and concluded that the second translation is closer to the original — but Justice Jackson then held that, even on the correct translation, Article 14(4) is limited to IAC arbitration awards.

The first two judges to reach the question took different approaches to it, and the third resolved the disagreement at first instance.

Justice Spink, in Naftogaz, sidestepped the Article 14(4) question. He acknowledged the translation issue and noted that even the more claimant-friendly version did not unambiguously cover foreign awards. Rather than resolve the constitutional point, he grounded the AIFC Court's jurisdiction in two pieces of secondary legislation: Article 40(3) of the AIFC Court Regulations, which directs the court to issue rules for the enforcement of "judgments and arbitration awards," and Article 45(1) of the AIFC Arbitration Regulations, which provides that "[a]n arbitral award, irrespective of the state or jurisdiction in which it was made, shall be recognised as binding in the AIFC." On that basis, Spink found jurisdiction and granted preliminary enforcement on a without-notice basis.

Justice Jackson, in POSCO, confronted Article 14(4) directly and held it to be controlling. He identified four reasons Article 14(4) refers only to IAC arbitrations: the heading of the provision references the IAC; it would be strange for the legislature to change the subject after announcing the heading; non-IAC parties have not consented to AIFC Court jurisdiction and do not fall within Article 13 of the Constitutional Statute, which defines that jurisdiction; and reading Article 14(4) as supplementing Article 13 would be "bizarre." On the AIFC Arbitration Regulations point, Jackson held that subordinate legislation cannot extend the court's jurisdiction beyond what the Constitutional Statute permits. The Arbitration Regulations therefore could not save Naftogaz's reasoning.

Notably, Justice Jackson addressed the political context directly. The Naftogaz ruling had prompted a formal intervention from the Minister of Justice ten days later, and Justice Jackson stated that he had taken "no notice whatsoever" of that debate, focusing solely on the legal issues. The fact that he felt the need to say so is itself significant.

Between the two rulings, the Ministry of Justice put its position on the record.

In an interview with zakon.kz published on 25 May 2026, Minister of Justice Yerlan Sarsembayev set out the Ministry's view that the Naftogaz v. Gazprom order will not be executed on Kazakhstan's territory. The framing was unsentimental: Kazakhstan, he said, will not become a "transit venue" for the execution of awards that have no legal connection to it.

The substantive arguments are striking in how closely they anticipate the reasoning Justice Jackson would adopt two days later. The Minister identified four reasons the case lacks any jurisdictional connection to the AIFC: Gazprom is not a participant in the AIFC; the disputed gas-transit transaction was not concluded within the AIFC; the dispute is not governed by AIFC law; and the parties did not agree to refer recognition and enforcement to the AIFC Court. On this basis, the Minister argued, the Constitutional Statute limits the AIFC Court's jurisdiction to matters and parties connected to the AIFC, or to disputes the parties have mutually agreed to refer there. That is essentially the structural reading of Articles 13 and 14 that Justice Jackson then arrived at in POSCO.

The Minister also flagged the procedural posture that makes the Naftogaz order vulnerable on its own terms: the order was made without participation of the respondent, is notification in character, has not entered into legal force, and is subject to the 14-day window for Gazprom to apply for cancellation, with a full inter partes hearing to follow.

On the broader New York Convention framework, the Minister distinguished Kazakhstan's general treaty compliance from the AIFC route specifically. Kazakhstan is a party to the 1958 Convention, and Article 503 of the Civil Procedure Code governs the proper venue for enforcement applications in the ordinary courts: the court where the dispute was considered, the location of the respondent's legal entity body, or — failing those — the location of the debtor's property. The Minister observed pointedly that Gazprom's location is known, implying that Kazakhstan is not the proper venue under that rule.

Two further points from the interview have practical weight. First, the Minister disclosed that the Ministry of Justice is currently preparing legislative amendments on the recognition and enforcement of foreign arbitral awards in Kazakhstan — meaning the statutory framework on which both Naftogaz and POSCO turn is itself in motion. Second, Vice-Minister of Justice Daniel Vaisov was quoted as having earlier emphasised that the AIFC Court did not consider the substance of the dispute, only the question of recognition of the Swiss arbitral decision — a careful reminder that the AIFC proceedings did not relitigate the merits.

The combined message of the interview is direct: the executive branch of Kazakhstan does not accept the Naftogaz line of AIFC jurisprudence as a basis for enforcing foreign awards in Kazakhstan, and legislative changes to clarify the position are in progress.

The AIFC has spent the better part of a decade positioning itself as a common-law, English-language enforcement venue in Central Asia, distinct from Kazakhstan's ordinary courts. That positioning rested on two assumptions: that the AIFC Court would enforce foreign arbitral awards, and that it would do so independently of political pressure.

Both assumptions are now genuinely in question for ordinary commercial enforcement.

What began as a disagreement between two judges has now been resolved at first instance, and against enforcement. Justice Faulks has set aside the one order that had allowed it, on a ground that had not previously been argued. The three earlier decisions pointing the other way have been characterized as preliminary, and one of them, Pacific Trade House, has since settled. A party filing at the AIFC today is filing against the current weight of first instance authority, though none of it has yet been tested on appeal.

The Ministry of Justice intervention adds a second layer of risk. Even where a claimant obtains a favorable AIFC order, the practical question of execution against Kazakh assets requires cooperation from Kazakhstan's enforcement institutions — and the Minister has now stated, on the record, that the Naftogaz order will not be executed on Kazakhstan's territory, whether or not there are any genuine assets to enforce the order against. The doctrinal question of AIFC jurisdiction is therefore not the only obstacle; a sustained AIFC enforcement order would face declared executive opposition at the implementation stage.

It is worth being precise about what has and has not been decided. The May order was made without notice and on a preliminary basis; Gazprom then appeared, the jurisdictional question was argued in full, and the order was set aside in July. What exists now is a reasoned first instance judgment on Articles 13 and 14, delivered with the benefit of argument from both sides, and an appeal against it. No appellate court has yet ruled on whether the AIFC Court may enforce foreign awards, so the question a claimant or a respondent faces is how an appellate court would read the Constitutional Statute rather than which first instance judge is assigned.

The other route — enforcement through ordinary Kazakhstani courts — has its own history. POSCO failed in Almaty before turning to the AIFC. The Almaty courts refused enforcement on grounds (non-receipt of the award by the respondent, a parallel criminal investigation against the respondent's former general director) that, on the face of the AIFC's description, did not invite confidence. Foreign award holders looking to Kazakhstan have, in practical terms, two general doors: one whose availability is likely to be settled on appeal, and one that has been hostile. The Minister's reference to Article 503 of the Civil Procedure Code signals that the ordinary-courts route will be argued on strict venue grounds wherever it is invoked.

The third gateway in Article 13(4) covers "disputes transferred to the AIFC by agreement of the parties," and it is the one the July reasoning turns on.

The analysis Justice Faulks adopted runs through consent. Where parties agree to refer a dispute to the Astana IAC, the reasoning goes, they thereby accept the jurisdiction of the AIFC Court, and Article 13(4) gives the court exclusive jurisdiction over disputes transferred to it by agreement. The converse followed on the facts: in agreeing to arbitrate under the ICC Rules, or ad hoc, the parties had not accepted the AIFC Court's jurisdiction.

Read that way, what the judgment identifies is an absence of consent rather than a disability in the court, which suggests that parties who address enforcement expressly may be in a different position from those who do not. How far that goes is untested. An investor relying on an express submission to the AIFC Court would be met with the argument that Article 13(4)(3) cannot be used to confer a jurisdiction the Constitutional Statute withholds, and that the gateway transfers disputes rather than enforcement of awards made elsewhere. A respondent resisting enforcement would meet the reverse argument, that consent is precisely what Article 13(4)(3) makes decisive and that the court said so.

The practical consequence is that the choice of arbitral institution, and whether an arbitration agreement or an investment treaty says anything express about recognition and enforcement in the AIFC, are worth settling at the drafting stage rather than at the enforcement stage. Neither point has been decided, and I would not treat either as a route that can be relied on unless and until the Court of Appeal has spoken.

For investors and counsel considering enforcement of a foreign arbitral award against assets in Kazakhstan, several points follow.

First, do not plan an enforcement strategy around the assumption that the AIFC Court will accept jurisdiction over ordinary commercial foreign awards as a general matter. The question is genuinely unresolved at first instance, an appellate ruling will likely be needed before the position is settled, and even a favorable AIFC order may face declared executive opposition at the implementation stage. Any without-notice or preliminary order obtained on the Naftogaz line of reasoning is exposed if the respondent appears and briefs the jurisdictional point fully.

Second, identify the asset profile early. If the target assets are concentrated in Kazakhstan and cannot easily be reached through other jurisdictions, the courts of Kazakhstan may be the only viable option absent parties' consent to AIFC's jurisdiction. If assets are also located elsewhere — including in jurisdictions where New York Convention enforcement is more predictable — those routes should be considered first, or in parallel.

Third, expect the jurisdiction issue to be fully argued, and on two limbs rather than one. After the July judgment, a party resisting AIFC enforcement of a foreign award is likely to lead on the Article 13(4) gateways and to treat the Article 14(4) translation question as secondary; a party seeking enforcement will need an answer to both, together with the hierarchy between the Constitutional Statute and the Arbitration Regulations and the consent point under Article 13(4)(3). No application of this kind is likely to proceed without a fully briefed jurisdictional argument, even where the respondent does not initially appear. For parallel ordinary-court enforcement, the strict venue rule in Article 503 of the Civil Procedure Code will also need to be addressed.

Fourth, watch the legislative reform. The Ministry of Justice has announced that work on amending the recognition-and-enforcement framework for foreign arbitral awards is underway. Until that work is complete and the direction of the amendment is visible, the planning landscape is unstable. Whether the reform broadens or narrows the AIFC route or disturbs the position in the ordinary courts will materially affect strategy.

Finally, the appeal is the thing to watch. Permission to appeal was granted on 21 August 2026, so the question is likely to go before the Court of Appeal for the first appellate consideration it has had, and under Article 13(7) any decision it gives would be final and binding. Two other routes to a settled answer remain open alongside it: the legislative amendments the Ministry of Justice has said it is preparing, and rules or practice directions under Court Regulation 40(3), which the court has the power to issue and has not yet issued. An officially translated and published English text of the Constitutional Statute would remove a further source of argument. Until one of these lands, the position is unsettled and should be planned for as such.